BNZ has trimmed six basis points from its two-year "special" mortgage interest rate, but cut a couple of savings rates by 10 basis points.
BNZ's reducing its two-year "classic" mortgage rate for owner occupiers to 3.79% from 3.85%. Although now lower than its major rivals, the cut brings BNZ in line with HSBC's two year rate, but still trails China Construction Bank's 3.65%.
See all banks' carded, or advertised, home loan interest rates here.
Here is the full snapshot of the advertised fixed-term rates on offer from the key retail banks.
| below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| as at July 15, 2019 | % | % | % | % | % | % | % |
| ANZ | 4.49 | 3.85 | 4.19 | 3.85 | 4.05 | 4.85 | 4.95 |
 |
4.49 | 3.89 | 3.89 | 3.85 | 4.05 | 4.35 | 4.45 |
 |
4.99 | 3.85 | 4.79 | 3.79
 |
4.05 | 4.35 | 4.45 |
 |
4.79 | 3.85 | 3.85 | 3.99 | 4.29 | 4.39 | |
 |
4.99 | 3.85 | 4.79 | 3.85 | 4.05 | 4.35 | 4.45 |
| Co-operative Bank | 3.89 | 3.89 | 3.89 | 3.89 | 4.05 | 4.35 | 4.45 |
| China Construction Bank | 5.15 | 5.10 | 3.65 | 3.90 | 5.30 | 5.30 | |
| ICBC | 4.85 | 3.85 | 3.99 | 3.95 | 3.89 | 4.29 | 4.39 |
 |
4.85 | 3.79 | 3.79 | 3.79 | 3.89 | 4.19 | 4.29 |
 |
4.99 | 3.85 | 3.85 | 3.85 | 3.99 | 4.49 | 4.49 |
Incl price match promise |
4.85 | 3.85 | 3.99 | 3.79
|
4.05 | 4.35 | 4.45 |
In addition to the above table, BNZ has a fixed seven year rate of 5.95%.
Meanwhile, BNZ has lowered both its seven month term deposit rate and seven month term PIE rate by 10 basis points to 3.15%.
All carded, or advertised, term deposit rates for all financial institutions for terms of less than one year are here, and for terms of one-to-five years are here. And term PIE rates are here.
49 Comments
You might well be right TM2. Recent history in NZ does not argue with your point. Far from it. But spare a thought for the elderly, infirm etc who do not have any capability at of managing a rental property, maintenance, regulations, and tenants good or bad. At their age and stage, they need their capital invested safely for a steady return and reasonably quick access in case of need. They are just trying to make do with what they have got. In Canterbury 10 pensioners have died this winter from the flu. Could it be that their depleted investment earnings have meant less home heating, less healthy diet and staying away from the doctor? Not in NZ one would hope.
northman46
As a retiree, I am moving my td as they mature into a KiwiSaver balanced fund (BNZ) with more exposure to equities but with some bonds etc. Getting a far better return than td and if needed sooner than expected as I am 65+, I can have money in my everyday account within 5 days with no fees (or shift to another KiiwSaver investment profile if need be) as opposed to 30 days notice for td and break fees involved.
I am concerned about slowing global economy, and effects of trade wars and Brexit etc but I am expecting cuts by FED and NZ OCR will mean that equities could hold and even continue to do OK.
My wife has become a property investor - albeit reluctantly - this past month. Yields are by historical standards are abysmal (I remember when a yield of less than 10% wasn't considered a good investment and not to be mentioned at property investors meetings) but a yield of 5.5% and capital gains (here in HB) over 5 years look a hell of a lot better than sub-3%, and most likely less, td rates over the same five year period.
P8, would you mind sharing what your balanced fund returns?
You and your wife probably already know, as a property investor, don't be "average", you make your money when you buy, if you look hard enough and you know your stuff you can quite easily buy a property for 20% under its value or improve its value by 20% in 3 months, and since you're probably only putting 20% in, you're effectively doubling your money
Hi Yvil
1. KiwiSaver
My return is a little bit more complicated than simply past and current returns.
Firstly a little background. I posted last August that I was concerned about the outlook for equities due to a variety of factors so I moved my funds into a moderate fund (but also holding some term deposits laddered six monthly). By November I felt that there were changed signals (comments about cuts in FED and NZ OCR, plus trade war talk moderating) so early in November I shift to the slightly more aggressive BNZ Balanced KiwiSaver. The NZ and global share markets did pick up soon after (which I am happy to take a screen shot of and forward to interest.co as proof) and it has generally continued to trend upwards since. I was fortunate that I avoided the fall between late Sept and November; some would say it was just luck on my side.
I had a term deposit mature in early June, but held it in my everyday account rather than transferring it immediately as the market was volatile at the time (read cr**py) but I did so in early July and missed the down turn at that time.
So my timing has been a factor in my recent return and as mentioned some would say I am lucky; but I follow interest.co for a reason - to make informed decisions.
Without going too deeply into the calculations, I have probably had a conservative 8% or 9% return since November (relating to about a conservative 12% annually). The current return for the BNZ balanced account can be got from their website; however, remember that I have had some good fortune in my movements and timing.
Historically (over the past 6 or 7 years), without checking that particular fund has been returning around 7-8%pa. after fees. The growth fund a little higher.
However, I am the first to recognise that past performance is no indicator of future performance. However, I do feel that a balanced fund such as I have (which includes equities) is likely to significantly out perform term deposits because I (i.e. personally) feel that low cash rates are likely to mean that equities are more likely to have better returns than the like of term deposits.
I have long posted that I feel KiwiSaver is an excellent investment vehicle for post 65 retirees. One is not investing in a very limited range of shares but rather at low cost tapping into the expertise of fund managers and there being no entry/exit fees and money is more readily available than most other investments I know.
I will be watching what is happening locally and internationally and if there are significant indicators which have long term implications I will be either transferring my funds into either a more conservative fund or term deposits (but the later would have to change dramatically). I don't see this as a monthly event; rather a review every six to 12 months.
2. Purchase of rental property
My wife purchased her rental property without needing a mortgage - i.e. 100% equity. Hence your doubling of 20% deposit on a property 20% below market value doesn't apply (unfortunately!!!). But you are correct; it is more important - especially for FHB - that if proce is the major concern, then the purchase price of a property vs market value is more important than market trends post property market peak.
My wife is looking to a five year term to avoid the implications of the bright line test. Over that time period her net return from return will be just over 4%pa which is going to be better than falling term deposit interest rates. I am also fairly confident that over that time period we are likely to see some capital gains, but these are not going to materialize until the property is sold. Is a capital gain likely - I am not going to debate it, but if it doesn't eventuate then she will just hold longer waiting for an significant up term which she likely to do anyway; term deposit rates or equities would have to be much higher and assured than currently.
3. Risk tolerance
It is not surprising that at my age I am reasonably risk conservative so I am not getting into Bitcoin or the likes seeking 20% with the far higher risk involved.
Thanks for your reply P8. Please be mindful that selling a property after 5 years does NOT guarantee you pay no tax on the capital gain, the "intention" to buy an asset for a capital gain is still taxable, no matter the timeframe. In you post above you have hinted that you are holding the property for 5 years in order to avoid paying tax on capital gain, be very careful with that statement!
P8, yes, with capital gains largely gone and with yields as paltry as they currently are, property for investment purposes is becoming an illiquid trap. As Yvil correctly points out, it's now more of a trap under the "intent" provision. IRD knows that investors are today more like speculators when they're prepared to leverege up on an investment that provides gross sub 4% yields. Speculators seem oblivious to how much their activities are on Inland Revenues radar.
northman46,
If you can ignore the idiot who styles himself lonewolf,then try this; 60% in a diversified share portfolio-30 holdings with a strong bias to sustainable dividends-20% property-excluding home-15% cash and 5% misc.
of course,I am long retired,but have always favoured income producing assets. The net yield on TDs is not great and reducing,but that doesn't matter. When the bubble bursts,as it must at some point,liquidity will be king once again.
Kenesis looks like a good place to park some cash outside the banking system and you can use it for payments as well.
Kinesis is a yield-bearing digital currency based on 1:1 allocated physical gold and silver
Actually, BNZ was already quietly offering 3.79 for 2 years a fortnight ago. I know because a term deposit matured and I used it to pay down a mortgage on a rental and fix the remainder. The money from the TD worked harder that way. Ah Tds, what to do? It’s all very well to suggest commercial prop, bitcoin, managed funds and other share/bond investments, but you know what, I am in my 60s and sick sick sick of all the hassle of extracting returns from my hard-earned pile. I was looking forward to no-brainer TD returns and now all that planning was for nothing! I have property and I don’t want anymore exposure to that. I’ve been in gold and physical ownership is problematic and gold certificates are ‘t satisfying, plus there’s GST. I see a slowdown ahead globally and cash is king at those times but how far off is that and how am I meant to live in the meantime apart from eating capital?
NZ deposit rates are MASSIVELY higher than most other countries.
This is because too many people spend their money, i.e. on the clamor for investment properties on this thread, and so NZ inc has zilch savings. Deposits are needed for lending, so artificially kept high. Those asking for lower and lower loan rates need to remember the other side to that coin.... when there are little depos in market to maintain legislated ratios, lending will slow down.
Err, that's exactly why they need to attract deposits.
I don't understand why people don't understand this simple fact. If retail deposits weren't required to fund/offset/balance lending, we wouldn't have interest rates where they are... miles above wholesale rates. #sigh.
TD's still working for me but as my only income source I'm only paying about 11% tax on it. The government should look at stopping taking tax from your savings, it would certainly promote savings. Seriously no point in trying to save while working, your paying to much tax and your money is better spent paying down the mortgage instead.
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